When receiving crypto assets for a friend, the key logic of explaining the beneficiary relationship is: Tell the platform that you are the "Beneficiary" of this transfer, and the funds come from a "Third-party," not from yourself (First-party). The Travel Rule (Travel Rule) clearly requires distinguishing whether a transfer is to oneself or to a third party, as the compliance processes are completely different.
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Step 1: Confirm the Transaction Type and Choose the Right Declaration
On the transfer page or deposit verification page, the source of funds is usually divided into two types. You must select the correct one to enter the correct information submission channel. Choosing the wrong one may cause verification failure or funds being frozen.
Determine whether this transfer is "to myself" or "to a friend." If you are receiving this money on behalf of a friend, then the actual sender is not you. This is a third-party transaction, and you must honestly select the "Third-party" or "Receiving on behalf of someone else" option. Once selected correctly, you will enter the corresponding information form.
Risk Warning: Misrepresenting the beneficiary identity (e.g., marking a third-party transfer as a first-party transfer) may violate the platform's terms of service. Some platforms explicitly prohibit improper third-party transfers. If it is discovered that a third-party account is used for receiving or sending payments, the platform assumes no liability, and the related funds may be at risk.
Step 2: Prepare Beneficiary Information Based on the Source of Funds
After selecting "Third-party Transfer," the platform will require you to provide detailed information about the parties involved in the transaction. This information must exactly match the KYC records on the sender's platform and your friend's account details.
The "Beneficiary Information" you need to fill in usually includes the recipient's full name (legal full name, consistent with the KYC on the sender's platform KYC), the recipient's residential address (complete street address, city, country), and the account type (individual or business entity). If receiving on behalf of a business entity, some platforms may also require additional information such as a Legal Entity Identifier (LEI).
Common Reasons for Verification Failure
The biggest issue is information mismatch. If your friend's KYC name on the sender's platform is "Zhang Wei", but you fill in "Wei Zhang" or "David Zhang", the system check will fail and the funds will be stuck. Another overlooked point is the address format—the recipient's residential address must match the address registered on the recipient's target platform.
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Follow-up Guidance
After submission, pay attention to the status changes in the deposit history. Travel Rule verification is usually completed within 30 minutes to 2 hours, though some platforms require manual review. If you find that the status stays unchanged for a long time, contact the platform's customer service and provide the transaction hash and the beneficiary information you filled in for manual follow-up. It is worth noting that if your friend eventually needs to explain the purpose of the funds to the platform as well, they will also need to prepare sender information—"who the funds came from"—which is another set of compliance procedures.
